In the downturn in interest rates, savers are looking for alternatives to savings accounts. That gives Dekabank a big boost.
Dekabank is benefiting from the increased demand for funds and certificates when interest rates are low. After a sharp jump in profits in the first six months of 2021, the Sparkasse securities house is expecting an above-average economic result for the year as a whole.
“Deka is very healthy and the figures show that our business model is well prepared for the challenges of the next few years,” said CEO Georg Stocker on Thursday. More and more savers discovered securities investments for themselves in the low interest rate environment.
In the first half of the year, Deka benefited primarily from strong commission income and a significantly lower need for provisions for possible loan defaults. The economic result – the institute’s key figure – more than doubled to 343 million euros (first half of 2020: 162.5 million). It also significantly exceeded the result before the corona pandemic (first half of 2019: EUR 223 million).
For the year as a whole, Deka is now expecting a result that is between 20 and 40 percent above the average of the past five years of around 400 million euros. In the spring, the institute, which is 100 percent owned by the savings banks, expected an economic result of around 400 million euros.
Many savers were looking for alternatives in view of the slack interest in savings accounts and the like. At 11.0 billion euros, Deka exceeded sales to private customers in the first half of 2020 by 60 percent. In particular, equity funds, real estate funds and certificates were in demand. 18 percent of new business went into sustainability funds. The bottom line was that more than 590,000 new securities savings plans were signed, an increase of around 68 percent compared to the same period in the previous year.
Business with institutional customers such as insurance companies and pension funds amounted to a net 2.5 billion euros (7.5 billion euros). As expected, Deka had lost a major customer with a volume in the high single-digit billions. As a result, the Deka Group’s total net sales fell by 6.3 percent to around 13.6 billion euros compared to the same period in the previous year.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
